There’s been a lot of discussion and near-obsession lately about alleged “shill bidding” by a certain domain auction company executive, but most domainers didn’t know there was a larger and more relevant news report about live auctions by the company that bought the domain, Auction.com. On its face, it seems this story eclipses the “Halverez” scandal by a long shot.

“Inside Edition“, a TV news show, investigated home foreclosure auctions held by the Real Estate Disposition Corporation (REDC), the buyer of the currently 4th-ranked highest-priced domain name sold this year, AUCTION.COM. This nationally reported story aired on November 25, 2009 on  “America’s NewsMagazine”, as Inside Edition calls itself.  The televised story was also transcribed in its entirety on Inside Editions’s website.  Although the show seems nebulous, it has been a CBS-syndicated program for 22 years. It covers stories on consumer reports, hidden camera investigations, and celebrity gossip.

Here’s are portions of the transcripts on the broadcast story from INSIDE EDITION‘s website:

“Airdate: 11/25/2009

It’s fast-paced, loud, a total frenzy, and when the gavel slams down, you could be a homeowner.

And business is booming. Every weekend in ballrooms across America, hundreds of people flock to foreclosure auctions, hoping to get a piece of the American dream at a fraction of the price.

INSIDE EDITION went to auctions in New York City and Dallas, and right away, we noticed something curious.

As soon as the bidding started, men in tuxedoes began pointing and yelling into the crowd as if they saw someone bidding. Maybe they were seeing something we didn’t.

“…It was as if they were screaming and yelling and pointing and shouting, but you couldn’t see anyone else they were talking to,” says real estate expert Jim Randel, who attended an auction with INSIDE EDITION. He says he believes auctioneers create this hysteria to get people to bid.

There’s another thing we found curious. The brochures showed hard-to-believe starting bids, $500, $1,000 for nice homes. But when those homes came up for auction the auctioneer started at $1,000, but immediately jumped to $10,000, then $20,000. INSIDE EDITION saw that time and time again.

The auctions are run by REDC, Real Estate Disposition Corporation. The chairman, Rob Friedman, says there’s nothing wrong with generating interest in the homes with low starting bids, and they are legally allowed to bid up the price themselves. “People are getting great values at these auctions. We have sold houses for $500 in several auctions,” he says.

…(responding) “Here it is on your brochure and you need a magnifying glass to read it,” says INSIDE EDITION’s Chief Investigative Correspondent Matt Meagher.

“It’s announced at the auction, it’s on our website, it’s literally in seven different places.  We really do want all buyers to be informed,” Friedman says.

But Jim Randel warns consumers if you’re thinking of attending an auction, it’s buyer beware: “You might be able to pick up a good deal here but at least know what the rules of the game are,” he says.

As for those guys in tuxedos who appear to be pointing to no one, the company (REDC – AUCTION.COM) says they (the “ring men) are not always responding to someone in the audience, but they are legally allowed to do that.”

Auction.com was reportedly purchased by REDC (located in Irvine, California) on March 24, 2009, for $1.7 million.  Auction.com now points to REDC’s company website at REDCGROUP.COM, where they indicate they have the required licenses and regulatory affirmations to hold live auctions:

“Real Estate Disposition Corporation (REDC) is a fully licensed and bonded real estate auctioneer and sanctioned real estate broker. With our recent partnership with Stone Point Capital, LLC, whose experience and relationships will assist REDC’s goal to grow our business worldwide, we look forward to an opportunity to serve your needs and invite you to join the list of financial institutions who have experienced outstanding retail reserve auction events with REDC.”

As listed on their website, REDC (Auction.com) claims to have created “innovative” auction programs:

“Using the auction-marketing process we pioneered and have since perfected, REDC has sold more than $5 billion of real estate assets, including a staggering $3.4 billion in 2008 alone. REDC conducted a record 300 auctions in 2008 and auctioned 32,800 homes, another industry record.”

Their website boasts they “pioneered” and “perfected” the auction-marketing process. REDC works with banks trying to recover funds from the tens of thousands of foreclosed homes in the country. They do this by promoting and producing their “innovative” high-powered auctions to consumers and investors, where they claim you can buy a home for as little as $500.

Some of REDC ownership subsidiary companies also own FOOTBALL.COM and LANDAUCTIONS.COM. Those entities as listed on whois are REDC, LLC; NRP, INC.; and NETAD,LLC.).

I wrote to REDC over two weeks ago asking for confirmation and clarity on this “legality” they claimed about self-bidding, but as yet I have received no reply.

The story has been reported and commented on in many other websites, including San Diego’s real estate blog. REDC also has an international reach, and at least one negative response to their auction procedures. REDC upset some people in the UK earlier this year according to this report in the Guardian dated Feb 28, 2009 on their auction tactics.

The purchase of Auction.com by REDC back in March of 2009 was reported in most domain blogs and news sites. Most featured a statement from Friedman saying REDC was “really wanting this domain”.

Another story by DSNews.com reports:

“In less than four hours this past weekend, Real Estate Disposition Corporation’s (REDC) online foreclosure auction generated $14.9 million in foreclosure real estate sales in Dallas, Houston, and Seattle. The sales activity produced by Auction.com boosted the company’s total sales to more than $2 billion in 2009, REDC said.”

SUMMARY: In this remarkable investigative report by Inside Edition, you can watch Auction.com’s selling techniques through hidden cameras videotaping some of their events. In what was alleged by Inside Edition to be a common occurrence,  the Auction.com “ring men” (guys dressed in tuxedos “pointing” out the bidders) were yelling and pointing into the crowd as if there was a new bid on a foreclosed home, when there seemed to be no person actually raising their paddle. Inside Edition’s story has REDC disclosing that it’s legal for them to do this. This sounds to me to be saying that the formal-attired “ring men” can indicate that someone has “made a positive bid” on a foreclosed home price during the auction, even though there is no auction attendee actually bidding.

However, the biggest surprise reported by Inside Edition was the comment by Chairman of REDC (Auction.com) Rob Friedman stating they were legally allowed to “bid up the prices themselves” on the properties they were auctioning.

AUCTION.COM WHOIS INFORMATION:

Registrant:

REDC, LLC RED, LLC

1 Mauchly

Irvine, California 92618

United States

Registered through: GoDaddy.com, Inc. (http://www.godaddy.com)

Domain Name: AUCTION.COM

Created on: 17-May-94

Expires on: 18-May-17

Last Updated on: 03-Jun-09

Administrative Contact:

RED, LLC, RED, LLC  jm@x5t.com

1 Mauchly

Irvine, California 92618

United States

+1.9496994246

++++++

Comments from the company, AUCTION.COM (REDC) to explain their position are welcome. Links to any disclaimers located on their sites, or PDF’s of auction brochures are welcome.

If anyone found further questionable or favorable information regarding REDC (Real Estate Disposition Corporation), please comment here.

I left out about 2000 words of other details and information extending this story, which I may followup on if there is interest.

I looked up the link in the articles listed in the NY TIMES and Wall Street Journal regarding the Chris Bosh debacle, where in their stories they listed a link to what a “CYBERSQUATTER” was.  Well, according to WiseGeek.com, a cybersquatter is what domainers think they are… and the majority of domainers avoid being put in this position by the domains they buy.

However, an interesting final statement on the link at WiseGeek.com was this:

“The era of the cybersquatter may be coming to an end, however. Companies and celebrities now have a better understanding of the importance of domain name registration. Acquiring the rights to their own names and product lines has become a much bigger priority, considering how much potential income could be lost if their preferred internet identities are already owned by a cybersquatter.”

I’ve talked to many domainers selling domains to end users, including Buy Domains and Snapname, and I’m sure all the other domain auction sales sites agree that many companies (end users) are starting to focus on buying their catalog descriptive product generic domains in order to control the “basics” of a brand they are promoting. We call it “BackBranding”, where promoting your brand along with the generic descriptive domain for what that brand represents is the most important online marketing move a company can make. If you request it, I will put up a list (other domain bloggers have done this too) of domain names and phrases that are generics, bought by large companies.

Listen up people. We are on the fence, with barbed wire at the top. People are trying to destroy us, just as the corporate world is beginning to understand the domain value process, and how important it is for them to own generic domains that do NOT represent TM infringements.

I hope the future for domainers follows the righteous path… (borrowed from “Pulp Fiction”)

Did I just read this article correctly? Can a court award a complainant 800 domains defining names and terms outside the complainant’s original filing? If I’m wrong, I just read this NY Times article where Toronto Raptors’ Chris Bosh was awarded his name as a domain name, PLUS 800 (eight hundred!) more domains that the respondent/defendant owned that have nothing to do with Bosh’s name.

What happened here, people? The plaintiff, Chris Bosh, files a lawsuit regarding a domain name they want: “Chrisbosh.com”.  After the case is heard,  the judge awards Bosh not only his name domain, but 800 more domains that the defendant, Luis Zavalda, owns representing other people’s names. I don’t get it.

What’s the difference if the Defendant owns 800 domains of other people in the news, etc, or if Chris Bosh now owns them?   How can a court, without due cause, pull 800 domains from someone’s account, that have nothing to do with the Plaintiff’s name, and give these supposedly “cybersquatted” domains to the plaintiff? Wouldn’t this now make the Plaintiff the so-called “cybersquatter”?

If someone sues you for a domain name they think is a TMer,  (let’s not even go into reverse hijacking), and if the person succeeds in winning the domain from you, is it right that the court awards you ALL other domains they think could be cybersquatted? (Please don’t make me write the incredibly stupid and wrong-headed descriptions of what many people think “cybersquatting” is.)

I’d like some feedback on this case, because I think it is the most important case against domainers ever held, besides the Kentucky ruling last year. Even the Wall Street Journal got in their digs, using the headline “SCORE: Raptor 1, Cybersquatter 0″. They should have had the headline read “SCORE: Raptor 800, Domainers 0″.

Domainers should be aware that three things are working against their domain investment:

1) Ignorance by the layman of what domain investing is, and their hatred of the fact you own a generic domain they wish they bought first.

2) The power of position, business strength, and recognition in swaying a court decision against you, even if your domain is purely generic.

3) The ability for those with deep legal funds to sue for domains owned by people who can’t afford to fight them

My position on my domains is strongly safeguarded by my legal team, but what about those domain investors who can’t defend themselves because they don’t have the funds? It’s the same old “American Justice” story — if you have money to sue, you win, if you don’t have money to defend yourself, you lose. So for court decisions in many cases:  “The Rich Win, The Poor Wish They Were Rich and Lick Their Wounds”

The justice system in our country seems like it is fair when you say the Pledge of Allegiance, but when you enter court, better have the cash to pay your attorney, who WILL make money one way or another.

I would like to find out more information on how the courts made Luis Zavalda a “cybersquatter” by owning domain names of famous people and their kids, but wrongfully giving 800 “name domains” to the Plaintiff. They’ve just made Chris Bosh a “cybersquatter” if they use their own logic in their ruling. I’ve seen some bad rulings before, but this one is absolutely ridiculous.  Maybe I have it wrong. Anyone have more info on this case?